The Court of Appeals for the Third Circuit sustained New Jersey’s appeal of a lower court’s decision rejecting its defense of sovereign immunity against a lawsuit attempting to seize land by eminent domain. The court rejected the plaintiff’s argument that the Natural Gas Act impliedly gave it the right to sue states via the federal government’s exemption from the Eleventh Amendment, because its project was authorized by the government. The plaintiff’s arguments relied in part on the authority of relators to file qui tam suits on behalf of the government under the False Claims Act, but the court held this authority did not extend to other statutes and did not extend the federal government’s exemption to the Eleventh Amendment to private parties. Further, the court noted that whether qui tam relators can sue states under the FCA is not yet a settled matter.
The case
PennEast Pipeline Company obtained federal approval to build a pipeline through Pennsylvania and New Jersey. Upon receiving approval, the company sued under the Natural Gas Act to condemn and gain immediate access to properties along the pipeline route, forty-two of which are owned by the state of New Jersey. New Jersey sought dismissal of the condemnation suit under the sovereign immunity provisions of the Eleventh Amendment. The District Court held that PennEast met the three requirements of the NGA, entitling it to exercise the federal government’s eminent domain power. Accordingly, the court granted PennEast orders of condemnation and preliminary injunctive relief for immediate access to the properties. New Jersey appealed.
The appeals court vacated the decision, finding that New Jersey’s sovereign immunity was not abrogated by the NGA. The court found nothing in the text of the NGA suggesting Congress intended the act to have such a result.
Notably, PennEast’s arguments relied in part on the authority under the False Claims Act for relators to file qui tam suits on the government’s behalf. The company argued that the NGA’s delegation of the federal government’s eminent domain power necessarily included the ability to sue states to force the desired result. According to PennEast, the opposite conclusion would frustrate the fundamental purpose of the NGA to facilitate interstate pipelines.
However, the court found the two powers at issue—the federal government’s eminent domain power and its exemption from Eleventh Amendment immunity—were separate and distinct. The court found no support for PennEast’s assertion of an implied delegation of the federal government’s exemption from Eleventh Amendment immunity.
The appeals panel noted that while courts have upheld qui tam suits by private parties against the states, they have done so because the suits are brought in the name of the federal government; because the federal government receives most of any amount recovered; because the government can intervene in the suit after it has begun; and because a case cannot be settled or voluntarily dismissed without the government’s consent. None of those factors applied to this case. Further, even the Supreme Court has expressed serious doubt on the question of whether a qui tam case would run afoul of the Eleventh Amendment.
